Adding USD ("A 13 Digit Sh*tcoin") to OnChainFX - Unqualified Opinions
we've capitulated, long live Fedcoin, ugh
|Ryan Selkis||Apr 1, 2019|| 7|
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In recent months, Messari has received tremendous pressure from New York’s power brokers to add “Fedcoin" to our OnChainFX dashboard, a new digital dollar that has undergone extensive R&D at Goldman Sachs, JPMorgan, Citi, and other major banks.
Although we were reluctant to add the asset, failure to comply with these repeated requests may have led to us getting forced offline, moving out of New York City, or being talked into applying for a “BitLicense.” According to state regulators, we’ve been “promoting alternatives against the best interest of the US Dollar, the US Government, and the banking cartel."
As such, we’ve reluctantly added Fedcoin to our research library (categorized under the “scams” sector), and provided more data on one of the industry’s most commonly quoted base currencies.
Fedcoin, also known as the United States Dollar, issued its genesis coin on April 2nd 1792. It was was originally a side-chain (layer2) of the 'gold' blockchain (layer1), with a peg of 17.73 Fedcoins per 1oz gold.
In 1834, the Fedcoin founding team changed the peg to 18.90 Fedcoins per 1oz of gold under an opaque governance process with little community involvement. The peg was further manipulated in 1853, and a hostile fork of the underlying US Government blockchain was attempted in 1861 but ultimately failed to gain consensus and was abandoned in 1865.
In the mid-1800s, known as the 'free banking era', Fedcoin offered an open API for layer3 apps, but often required Fedcoin-founder approval of application mechanics. These apps ('banks') were therefore inflexible and failed frequently. The layer3 API was ultimately shut-down completely in 1913, and a private-API was exposed for 12 pre-selected banks, turning the layer2 system into a 100% permissioned blockchain.
In 1933, CEO Fedcoin CEO, Franklin Roosevelt, issued Executive Order 6102 which forbid anyone from being a layer-1 (gold) validator. This was a major shift that broke untested assumptions at the core US Government protocol level, and led to further devaluation of FED to 35 FED/1oz Gold. This event also set the stage for the Nixon Shock in 1971 when new Fedcoin-CEO Richard Nixon pushed a protocol 'upgrade' which completely removed the side-chain (FED) from the main-chain (gold), in favor of running the side-chain exclusively. This was despite data suggesting side-chains only survive an average of 27 years without an underlying main-chain.
In calculating the Y2050 supply of Fedcoin, OnchainFX uses this history as a guide and assumes Fedcoin validators will be unable to maintain their 2% annual inflation targets in perpetuity. We assume control breaks down in the late 2030s at which point a typical hyper-inflation curve begins. This is reflected in our Y2050 estimate of FED M1 money supply of $272,143,064,975,544.
We expect hyperbitcoinization is likely to follow thereafter.
We recognize this will not be a popular addition to our research library, and apologize to users who feel this degrades the OnChainFX experience.
Former OnChainFX loyalist and current BitMEX CEO Arthur Hayes told us he was ashamed we would "give credibility to that 13 digit sh*tcoin,” although he did seem intrigued to learn forex brokers could offer up to 400x leverage on Fedcoin trades.
“And I thought my customers were degenerates. Wow.” Hayes added.
Not all within the crypto community have panned the move. Ben Lawsky, a former New York regulator and board member at Ripple, a cross-border payments company with a loose affiliation with the fully-decentralized XRP protocol, praised Fedcoin.
“Bitcoin and private cryptocurrencies are too often used by bad guys. XRP and other fully surveilled assets like Fedcoin will usher in the Panopticon I’ve dreamed about since I was a little boy,” Lawsky said. "It’s amazing to see OnChainFX cover the innovation I see every day in the US government, but others in the community seem completely unwilling to acknowledge.”
Asked whether he would prefer to receive his paycheck in Fedcoin or XRP, Lawsky said, “I don’t know, man. They’re both great, and not at all degrading to support."
Want to add Fedcoin to your watch list? You can do so here.
Just remember we warned you it was a scam.
P.S. Share. Subscribe. Spread the (rational) crypto love. Tweet at me or Messari for requests, feedback, comments, or questions.
P.P.S. We da real April Fools. In the midst of our excitement to write up our new Fedcoin coverage, we forgot to send the dial-in invitation out for the Messari Pro analyst call that starts in 20 minutes. SORRY! We’re going to kick these off next Monday, April 8, and in the meantime, have been aggregating feedback and answering questions in our Telegram chat. The invite link did go out in last week’s emails.
Reply to this email if you didn’t receive a link or have questions you’d like for us to cover. In the meantime, we have a full slate of amazing interviews for you to peruse in our iTunes catalog. Our Unqualified Opinions series is growing relentlessly.
Best of the Rest - What We Missed Last Week
Every weekend, we dig through the past week’s posts from crypto’s other great sources of content to see what we missed in our own weekend reads.
Here’s us curating the curators:
Staking is has been a hot topic for cryptoassets in 2019 and Meltem Demirors shares some takeaways from the first Staking Summit held on March 18, 2019. There are 11 proof of stake networks with a network value of more than $100 million, representing a total network value of nearly $9 billion. Demirors breaks down some key areas in staking such as syntax (how to distinguish work from governance), regulation and taxation, eduction, tools, and the politics of staking.
Optimal ways to fund open-source development has been debated ad nauseam with solutions ranging from donations to protocol level inflation. The latter is advocated for by Kevin Owocki via EIP1789 as a more sustainable model to remunerate development of open source software. The crux of the proposal is to provide ample funding to Ethereum by allocating 20% of issuance rewards to go to organizations that fit with community values in order to fund core development as well as tangential projects to the ecosystem. Owocki also suggests raising inflation 10% (2ETH->2.2ETH) and decentralizing funding distribution via a MolochDAO-like structure.
While Venezuelan’s national currency has been grossly mismanaged, digital money has started to creep its way into the country. This has manifested itself through increased use of Bitcoin, but also forced payment of pensions from bolivars to the national “cryptocurrency” the Petro. While Bitcoin represents an escape from economic oppression, the Petro shows a rather dystopian future for digital money. Government controlled digital currencies enable an unprecedented level of financial surveillance, and it is being experimented with by central banks across the world. Decentralized cryptocurrencies like Bitcoin hope to offer a viable alternative albeit with many hurdles to overcome such as privatizing the public blockchain, censored internet (Great Firewall of China), and difficult user experiences.
Did I miss something?
Send me the link, your twitter handle and your best imitation compression algorithm write up. If I like it, I’ll include your bit next issue (with attribution).
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